ASDA’s Fresh Approach to Grocery Loss Prevention

Grocery Loss Prevention

Most parents understand the narrative of “bringing up baby”—the tiny first steps that, with nurturing and encouragement, turn into giant strides as the infant learns independence. When the parent is a retail behemoth with a reputation for uniformity, it is fair to assume that an old-school “one-size-fits-all” approach would become the norm.

However, Walmart’s takeover of the UK’s ASDA in 1999 was anything but an imposition of its own parenting style.

Years later, there is clear evidence of a supportive partnership. ASDA’s 600 stores and over 170,000 colleagues have leap-frogged Sainsbury’s to become the UK’s second-largest supermarket chain on market share, and the fresh thinking in the UK approach to grocery loss prevention has translated itself into ideas crossing the Atlantic in the opposite direction.

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Although challenged by the German discounters that have impacted the business of the so-called “big four” (Tesco, ASDA, Sainsbury’s, and Morrisons), ASDA has turned to leadership and teamwork in tackling some of the back-room areas seldom aired in public—the losses caused by dishonest customers and colleagues. Shrinkage caused by malicious activity is a huge issue for grocery loss prevention with their vast acreages and even bigger opportunities to abuse trust.

It could be argued that ASDA’s innovations have made it more of a target over the years. It was the first of the big four to introduce a wider non-food offering with designer George Davies, the man behind Next’s early fortunes launching an affordable clothing line in the late 1980s. It was also quick to introduce fuel sales with its 160 petrol and diesel forecourts consistently offering prices lower than its competitors. Pharmacy, optical services, and financial products followed in rapid succession, all of which presented marketing opportunities, as well as threats from less scrupulous customers.

LP Leadership

The company has been far from the green of its distinct livery when it comes to managing its growing risk matrix. Whereas many retailers invest in technologies or outsourced services to tackle the issues, ASDA, with support from Walmart, has put its money into a loss prevention leadership team unlike any other in operation in the UK. The model is an “in-source” operation rolling back the years of farming out crime-reduction control to third parties.

ASDA House in Leeds is the UK’s bustling headquarters of the Walmart-owned supermarket and is interestingly called “The Home Office,” which is coincidentally the name of the UK’s government department responsible for homeland security and crime. It is also the home of the Bergerac Project, the launchpad initiative that has transformed the perception of risk within the business. It is a team-centric approach that has transposed common perceptions of grocery loss prevention. Indeed, the security team has evolved from a reactive unit following the crime, to a proactive force of six “leaders” who are setting a new pre-crime agenda or preventing it before it impacts the business.

Claire Rushton, senior director of operational security, took up the story: “We wanted to devise a forward-thinking strategy that drove risk management for the business. We have recently in-sourced our retail guarding resource following my dissertation for my master’s degree in security and risk management, which aimed to understand the key differences in perceived effectiveness between internal security employees and third-party provided guards when generating a security presence within a retail environment. The core aims for the new operational security strategy were to deliver value for money, great results, and to achieve this we had to get the right cultural fit within the team. We have some great third-party partners supporting the business, but we wanted to be more effective with greater ownership and control through the line, and this was something that we felt would deliver results.

“Walmart offers us global guidance across a number of risk management areas, but there is freedom within the framework as part of an international partnership approach, and best practice is often shared.”

Historically, this is not ASDA’s first flirtation with US retailing—the association goes back to the 1960s. Although ASDA can trace its roots back to 1920s Yorkshire, where a group of farmers formed Hindell’s Dairy and started selling produce directly to the public, two other developments are significant to its modern identity.

First was its earlier alliance with the American-owned GEM chain, which came to the UK in the 1940s looking to open large stores that specialized in housing “shops within shops” (the forerunner of the modern supermarket) but sold its stock in 1965 to the then Associated Dairies and Farm Stores Ltd. This was two years after the business had merged with Queen’s Supermarket, the Pontefract enterprise run by the Asquith brothers, who built a fortune offering “permanent reductions” and shops open until 8 p.m. on Fridays. Value for money and choice became the founding pillars of the ASDA of today, a team heritage that continues to drive change. So it can be argued that the re-focused security team is an extension of the work of those earlier pioneers looking to shake up the world of retailing.

Team Dynamic

Bringing loss prevention services in house was just one part of the strategy, but policing over 170,000 colleagues and the exposure to countless customer threats via more than 2,000 LP professionals in the business required a broader leadership approach.

Bergerac and the engagement with ASDA’s executive board provided the baby-step approach to getting a leadership model in place. Headed by Rushton, the steps go further than the traditional LP model with a team that goes beyond the traditional profit protection and security remit. In addition to Andrew Rees, Rushton’s right-hand man and senior manager in strategy and central operations who focuses upon ASDA’s central and supply chain vulnerability, and Michael Cromarty, Rushton’s project coordinator, the leadership group is predominantly female.

This is a first in what many see as a mainly male-dominated sector, but this team dynamic looks beyond the “gender agenda” and more towards a holistic approach. Andrea Smith, the people-business partner on the team, is a human resources professional whose expertise is baked into the Bergerac model to drive desired training and behavior—the winning of hearts and minds—a concept which is also at odds with the traditional position. Indeed in many retail environments, HR is seen as an obstacle to effective LP as it is perceived to be more risk adverse when it comes to dealing with the consequences of dishonest employees.

Connelee Usher, a member of the leadership team who has a finance background, looks after business resilience and continuity from a broader perspective of new threats, such as potential cyber attacks and takedowns or even “tiger kidnappings.” And Louise Ellis and Sharon Smith are the senior security managers in the field for the north and south and the “go-to” people for 2,500 security personnel at the sharp end across ASDA’s estate.

Rees said, “Diversity is high on the agenda, and ASDA recognizes the benefits of gender balance across leadership roles. This has brought with it a more positive diverse culture, which is equally enabling for people to get on. No one has all the answers, and as a leadership team we are constantly learning from each other as well as everyone within the business.”

Communication is managed up and down the command chain through weekly conference calls, internal briefings, and monthly face-to-face meetings at ASDA House in Leeds. Problems for the field teams outside of those touch points can be dealt with through phone calls and emails to the expert advisors in the team.

Smith said, “If I come face to face with an HR issue, I am straight on the phone to Andrea to take some advice or gain support. That’s what it means to be part of a bigger and more knowledgeable team.”

Although much of the work focuses upon technology, people are the drivers of malicious behaviors, so a large proportion of the effort goes into preventative canteen or water cooler initiatives such as whistle blowing as it is essential to balance the reactive by driving the proactive as much as possible.

In one widely reported case, external thieves were stealing ASDA’s padded envelopes, filling them with stolen DVDs, and posting them to their own home addresses using the store’s own postal service, a ploy that was disrupted by store counter intelligence and the simple redeployment of padded envelopes within the store. It is these “envelope-pushing” attacks that keep the leadership team exercised at all times, but they are only as good as the intelligence that they receive.

As Rushton herself described, “We deal with everything from the super nice to the super naughty, so when Bergerac went live in October 2014, we wanted to make sure that it was about future-proofing the business and making it fit for purpose in terms of looking after our colleagues and customers.

“It is a wider team looking beyond crime and malicious behavior, which is why we have included HR and business continuity. When I built the team, I wanted to ensure we had the right mix of strengths and experience to maximize support and keep us developing. Some of the team has Police or military backgrounds, and others have come from stores or operational backgrounds or other retailers. In short, we knew what the team should look like, and a security background was not deemed as essential.

“My team is as much at home with HR or retail operations, but one thing they have in common—they are all experts and have a real passion for security within ASDA. As a leadership team, it is crucial that we work and fit together to inspire each other—that is how we achieve, together, and we are constantly learning.”

Bergerac did not simply happen in a vacuum: it was three years in the planning when the security leadership team consisted solely of Rushton and Rees, and together they made the necessary baby steps to engage the business that supported the change culture that introduced the wider team.

Rees’s remits include the command for the central team, logistics, management intelligence (MI), and physical security, alongside management of the communications room, the network CCTV, the ARCs, and the video and behavior analytical capability. A dotted line exists between Rees and Cromarty, who has helped develop ASDA’s own home-grown risk intelligence hub entitled ARM (ASDA Risk Management).

While Rushton’s team deals with the malicious threats, the non-malicious losses fall under the responsibility of her opposite number Brian Boyle, senior director of process and LP. Both teams speak regularly on a wide range of issues as the business tackles the total loss agenda.

“We work very closely as the two sides of shrink dovetail together,” said Rushton.

Fluid and Adaptable

It is far from the black and white of what would be regarded as malicious versus what falls into the non-malicious bucket, and the result of Bergerac has been that the security team is now involved early on in the planning process, for example when the business is considering new store openings. This is because the ARM can be fully deployed, not simply to advise against opening in certain areas, but also to deploy the right technology and security personnel to mitigate the risks to people, property, and profits.

Similarly, Usher with her business continuity role is consulted early on in the year to avoid brand reputational issues around events such Black Friday, the pre-Christmas sales that kick-start the festive buying series and, ironically, are an import from big retailers such as Walmart in the United States.

The last three years have been a journey for Rushton and her team. Back in 2012, grocery loss prevention was still viewed suspiciously as a “blocker” to sales performance, but now retail security is viewed widely as a one-stop shop covering everything from standards to investigations.

Rushton added, “It all started out on an engagement program because we were viewed as a blocker, whereas now we are seen as an enabler—a team that helps keep people safe and secure. Holistically, with the involvement of business continuity and HR we have helped to join up the journey, and we now deliver a consistent approach. LP is no longer talked about as sales prevention, but as innovative and ahead of the curve.

“Technology and the bad guys move fast, so we have to move faster, which means that security has to be fluid and have the ability to adapt quickly if it is to be fit for the future.”

ASDA remains the second-largest food retailer in the UK, despite a stalling in profits earlier this year, but the coordinates of change and growth have been set for the future. While sales are one indicator of performance, successfully tackling malicious loss is a major step forward with a team-focused, proactive approach that not only leads by example, but also embraces a wider range of intelligence-rich disciplines. Such skill sets also promote diversity of gender and the notion that the job is bigger than the narrow definitions imposed upon what it takes to be involved in security and grocery loss prevention.

This approach helps inform the narrative that the business will not shrink from the shrinkage challenge—malicious or non-malicious—and that this is an aspirational ambition that would make any parent proud and even make them re-evaluate the approaches and decisions that they take.

This article was originally published in LP Magazine EU in 2015.

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